Hiring a salesman on commission is a great way to throw money away

(if you don't know how to handle one)

I go for a run every day. Yesterday, while jogging in Merano, a small city close to  the Austria-Italy border, I found a poster outside a building. A company that produces truffles was looking for a salesman. Truffles are mushrooms that grow in the forest. They’re delicious. What could be easier? I went inside, in my running gear, and told them I was their man.

In the interview I learned that the company had been selling truffles to local restaurants for 12 years. Their rule of thumb was that for every 10 restaurants visited they got at least one order. They were looking for salesmen capable of achieving that benchmark.

I left the office and started to think. I was not interested in the job, but I was impressed by the clarity the company had about its sales.

It was like this: that company has:

• A clear and defined product – truffles. Not truffle oil or truffle scented soap. Just truffles, with standard dimensions, and standard processes to sell them.
• A clear target – restaurants and private customers. They do not sell to big supermarkets because they know they would lose money. They can calculate the loss of selling all the products they have to supermarkets perfectly. 
• A channel to market – a demonstrable “k” (the indicator that measures the economical effort to produce a result in term of customers).

On this last point, 99% of people do not understand that the channel is mostly determined by the unique value proposition of your product, and choosing the right acquisition channel is fundamental to highlighting that.

The truffle company’s advantage was that their truffles were high quality with a medium price. When a restaurant owner looked at their produce he could hardly resist buying it. The most important thing was that the company was aware of this.

I got to wondering if it is convenient or even possible for most marketing agencies to sell by using salesmen working on a percentage commission. And the answer I gave myself was: of course it is. But only with those given conditions.

How many hours does it take to evaluate an acquisition channel? How many hours of building processes are needed for a product to sell? In the truffle company, all those things were perfectly set up and well-oiled; the only thing missing was the last piece of the puzzle.

Digital marketing in the last few years has changed our lives, and the opportunity that new fields have created has generated an ocean of non-standard agencies. They are far from classically structured businesses, even if they should operate as a kind of business and follow basic procedures.

A salesman is just a salesman. A percentage salesman is paid according to the business that he or she brings to the company. Here, I’m talking about salespeople that are required to bring as many new customers as possible to marketing agencies. If the agency has processes and procedures to handle an infinite number of customers (with well-oiled HR procedures and delivery systems) that’s magic; if not, it can be a nightmare.

I was once part of the onboarding process of 10 customers from one agency to another. It took four months to do it. The great complexity of the procedures involved is something that could be underrated only by those that have no experience.

The company is the only player in this game that can say:

• What is their UVP compared to competitors?
• What are the data for testing different acquisition channels?
• How is their service structured?

This even applies to selling truffles. (By the way, truffles are a type of mushroom that grow wild in the forest; so they’re not even something you need to make; but they vary in size and you can use additives to make them last longer, change the price, and the target. And guess who makes all the decisions about the product? Exactly: the business owner.)

There's a general misconception about the ability to sell: selling means making a process easier and decreasing the risk of failure of the process, in this case the process of sales. 

Selling means make easier the process between a buyer and a seller, reducing the in comprehensions and using some techniques to move the buyer to buy. 

It is possible as well to lie about the product or the service to sell, it is possible but it won’t last longer. 

And I guess If you have sold once in you life you know how thin could be the border between two things 

What a Salesman should do is to bring you customers that: remain in your agency for long time, customers that can ideally afford a cross sell or an up sell to the service you are already providing. 

That is cheaper (you won't spend on marketing to do them), and they can make your service much more effective. If you don't get customers that are able to receive those services, you need to admit one thing: you are losing money! You will spend more time and energy looking for new money than you might receive from the customers you're already serving.

The variables that determine those passages come from the service development process that is under the control of the agency. The agency must be able to communicate promptly to the salesman what customers they want and with what features to allow him or her to generate targets that can receive more of the product. That increases the value of the customer.

How is it possible for the salesman to know by himself (without access to the company data) that, for example, for you the best landing page job to bring in is for a hairdresser that also needs ads management work from time to time, in support of which, incidentally, you have great case studies to show and ads all ready to put in place?

I can do the same demonstration in comments if needed, but the talents required are those of a wizard, not someone that does sales.

Let’s look at how to get the data for your agency and then at what data to provide.

1. Every service sold should be defined with clear processes.
2. The delivery process should be at least 70% clear for its niche and systems, and it should not be possible to change these if the service itself does not change. If the delivery or the service change too often, you have a problem.
3. ICA: know exactly what your target is. Spoiler: you won't know that until you have a stable population of customers. The ideal client is the one that needs your UVP and that you can reach through at least one acquisition channel. You will have a real ICA when you send a survey to your customers. All of them will answer the question “Why have you bought this service?”in the same way.
4. There is not an ideal channel.
5. You need to test.
6. And the test should be relevant.
7. You need to play at the same level as your competitors, that means that you might lose a bit of money reaching their audience and literally see the cost per stealing a customer to them. Or you may play in a blue ocean where customers are easy to attract but where sales processes are a nightmare that nobody can tell you how to deal with.
8. You need to be able to know when to bet and when to leave and test a new channel

You can start from the most used channels in your niche, and then move forward. But if you follow that method with someone, the cost will be the testing plus that person's fee. It does not sound like a good deal. Once you close a deal with the first customer, understand how you managed to close it – ask them directly after 3 or 6 months of renewing the contract.

When you’ve done that, the effect will be:

1. A clear and structured service.
2. A clear ICA
3. A clear attraction channel.

In my business I would be happy to send one of my guys to bid on a perfect SEO optimized Upwork profile, with the perfect pitch and the perfect sales team. I would probably charge only the cost price plus a small commission because I would know that 100% results were guaranteed.

The problem is that 99% of the time agency owners do not know how to do those things.

That is why agencies pay business developers more than salespeople, and frankly a good business developer could help and show you the right way to reach your goals.

In a business developer Facebook group (Business Developer United), I recently asked how many of them were paid on a percentage deal. Almost nobody. Most of them were getting a fixed salary plus a percentage. I interviewed more than 60 US business developers, and 70% of them were on the same rate.

The reason for that is simple: development of the business plus payment based on the results of the improvements made to the business.

We are paid for doing part of the work that the company should do. But there are some basics that everybody should know.

For instance, talking about the truffle company, the salesman knows the recurrent objections made by restaurants, if their budget is decreased or raised. That feedback must be listened to by the freelancer/ agency owner, and more importantly it should be understood. That is impossible without a basic framework that allows the basics of sales and account management of the customers to be understood.

Moreover if the business developer/ salesperson has a higher level of competence in managing the customer than the agency itself, it is not unlikely that you will lose the customer.

An easy example of this is companies that need branding. Give a company that needs branding to a marketing agency that has no experience of it and does not understand the responsibilities of having a real brand and see what happens.

Usually there's a huge misconception about sales and business development, but it is clear to me now. A business developer improves the processes of the business through sales.

For a the company, sales are like the food we eat. Theoretically we have a good metabolism to handle our dinner, but what happens nowadays is that we hire a personal trainer to help us manage our diet.

The most valuable things I and my team provide to my customers are tips and advice: we review the service, the processes, the concept and also the acquisition channel, which for now is limited to Upwork for our customers.

But I want to share these tips with you: if you want me to talk more about the sales/ lead generation processes for a marketing agency just comment below.